Is Currys (LSE:CURY) Undervalued On Its New Chubb Insurance Deal?

Currys (LSE:CURY) is back in focus after agreeing a multi-year deal with Chubb to underwrite its mobile phone insurance, reinforcing the retailer’s push into higher margin, recurring service revenue.

Currys shares trade at £1.429 after a 1-day share price return of 2.14%, with the 90-day share price return down 11.19%. The year-to-date share price return sits at 12.79%, and the 3-year total shareholder return is very large at about 3x. This suggests longer term holders have seen substantial gains while short term momentum has cooled.

Scan for other retailers building recurring service income like Currys by reviewing the hand picked 14 high quality undervalued stocks that already score well on quality and balance sheet strength.

Currys now combines a falling 90 day share price with a much stronger 3 year return and a bigger push into higher margin services. Does that balance still give buyers an attractive entry on valuation grounds?

Most Popular Narrative: 23% Undervalued

The most followed narrative on Currys puts fair value at about £1.85 using a 10.17% discount rate, compared with the latest £1.43 close. The story leans on recurring services and cash generation rather than short term share price moves.

Expansion of higher margin recurring services such as credit, installations, connectivity and repair, which now account for over 30% of UK revenue and have been growing faster than product sales, can keep lifting Currys group revenue quality and EBIT margins as more customers shift into these offers.

See why 21 investors see Currys as 23% undervalued.

Result: Fair Value of £1.85 (UNDERVALUED)

Still, rising wage and tax costs, alongside ongoing IT migration spending, could pressure Currys margins if the shift into recurring services and credit underdelivers.

Find out about the key risks to this Currys narrative.

Next Steps

Mixed signals around Currys can create FOMO fast. Stress test the thesis yourself, weigh both the upside and the red flags, then review the 4 key rewards and 1 important warning sign.

Ready For More Ideas Beyond Currys?

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